Japan says it will reimpose a total ban on US beef imports after a shipment contained carcass parts that could have posed a risk of BSE (mad cow disease).
The size of the Japanese market makes a ban a very costly problem
BSE was found in US cattle at the end of 2003, and Japan agreed to partially lift the ban after intense lobbying.
Japan is the US' most lucrative export market, and farmers argued that their meat was now safe and BSE clear.
Eating beef from infected cattle can cause a fatal human brain disorder, Creutzfeldt-Jakob disease.
In order to protect consumers from mad cow disease, Japan only accepts meat from cattle that is less than 21 months old and carcasses that have had their spinal cords, vertebrae, brains and bone marrow removed.
The sudden reimposition of the ban happened after a 390kg shipment of meat from New York was found to have some of the banned material still attached.
The US said it would launch an investigation into how the problem occurred and planned to send a group of experts to Japan.
"This is an unacceptable failure on our part to meet the requirements of our agreement with Japan," said US Agriculture Secretary Mike Johanns.
Mr Johanns said that while it was an unacceptable failure, it did not pose a threat to consumer health.
The loss of its most profitable market has already hit US producers and the price of cattle futures fell on the Chicago Mercantile Exchange.
Japan's Prime Minister Junichiro Koizumi said that he "received the agriculture minister's report over the telephone with his recommendation that the imports be halted and I think it is a good idea".
"This is a pity, given that imports had just resumed," he added.
In December, Japan said it would allow imports of beef that was less than 21 months old.
Japan said it would not allow imports until the US explained how the banned materials got into the shipment.
The beef issue is likely to feature during the visit to Japan of US Deputy Secretary of State Robert Zoellick next week.